CIBC Tech & Innovation Market Update – June 2025

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As AI continues to evolve, its impact on the job market, particularly for entry-level white-collar positions, has become a topic of conversation. Industry leaders like Dario Amodei, CEO of Anthropic, warn that AI could potentially eliminate up to 50% of these roles within the next five to ten years, leading to significant increases in unemployment rates. While the prospect of widespread job displacement may spark concern, without entry-level positions businesses may struggle to find skilled workers for higher-level roles down the line. We believe the more likely scenario is one where entry-level positions are redesigned to incorporate AI and allow new hires to engage in higher-level responsibilities. There remains an opportunity for workers to adapt alongside advancing technologies, and we expect AI will become a key component in both education and employee training.

Descartes released its annual e-commerce study, which highlighted slowing online purchasing growth after high double-digit growth through the pandemic. With sales in both the US and EU/UK projected to grow in the 6% range annually, retailers are addressing evolving e-commerce preferences as they shift from capturing growth to prioritizing customer retention. Leveraging AI-powered tools, such as route optimization and insights into consumer preferences, can help decrease costs and improve retention.

Q1 tech sector deal activity included several megadeals that obscured softer underlying activity. Alphabet’s $32B acquisition of Wiz lifted overall M&A deal value, even as activity declined. Venture funding did grow by 54% Y/Y, although that number was also skewed by an outlier, OpenAI’s historic $40B raise completed at the end of March. AI companies continued to lead funding, although activity slowed in April. Similarly, the IPO market has lost whatever momentum it had following “Liberation Day”, with several issuers postponing their filings. While large transactions boosted Q1 spending totals, we expect overall deal activity is likely to remain subdued until visibility on the macroeconomic environment improves.